Seyfarth Synopsis: August 31 was the California Legislature’s last day to send bills to Governor Brown for his approval or veto by his September 30 deadline. Chief among them are bills addressing sexual harassment.

2018, the year of #MeToo, saw California Senators and Assembly Members introduce numerous bills on sexual harassment-prevention, often followed by their colleagues’ response of “me too!” By the August 31 bill-passing deadline, the Legislature approved no fewer than 12 sexual harassment-related bills, as well as bills relating to lactation accommodations, gender quotas for corporation boards of directors, and various other labor and employment-related bills.

Below is a summary of passed bills now before Governor Brown for his approval or veto. Once the Governor acts (by his own September 30 deadline), we’ll provide an update on all labor and employment-related bills enacted into law this Session, as well as those bills that failed to pass and any that met a gubernatorial veto.

Sexual Harassment

Limiting Settlement Agreements. For settlement agreements entered into on or after January 1, 2019, SB 820 would prohibit and make void any provision that prevents the disclosure of information related to civil or administrative complaints of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. SB 820 expressly authorizes provisions that (i) preclude the disclosure of the amount paid in settlement and (ii) protect the claimant’s identity and any fact that could reveal the identity, so long as the claimant has requested anonymity and the opposing party is not a government agency or public official. SB 820 suggests that a violation of its provisions would give rise to a cause of action for civil damages.

Banning Waivers of Rights to Testify. As to any contract or settlement agreement entered into on or after January 1, 2019, SB 3109 would make void and unenforceable any provision that waives a party’s right to testify in a legal proceeding (if required or requested by court order, subpoena or administrative or legislative request) regarding criminal conduct or sexual harassment on the part of the other contracting party, or the other party’s agents or employees.

Banning Contractual Limits on Disclosure and Effectively Banning Arbitration Agreements. For agreements entered into, modified, or extended on or after January 1, 2019, AB 3080 would forbid any business to require, as a condition of employment , of conferring an employment benefit, or of entering a contract:

that a job applicant, employee, or independent contractor not disclose instances of sexual harassment suffered, witnessed, or discovered in the work place or in performance of the contract, opposing unlawful practices, or participating in harassment and discrimination related investigations or proceedings, or

that a job applicant or employee waive any right, forum, or procedure (e.g,, arbitration) for a violation of the FEHA or Labor Code, including any requirement that an individual “opt out” or take affirmative action to preserve such rights.

AB 3080 would make actionable any threatened or actual retaliation against an individual who refuses to consent to the forbidden requirements. AB 3080 would authorize injunctive relief and attorney’s fees to any plaintiff who proves a violation. Possibly because much of AB 3080 could be held preempted by the FAA, AB 3080 contains a severability clause by which the rest of the law will remain in effect if a court finds certain sections invalid.

Extending Liability for Employers and for Businesses Using Labor Contractors. AB 3081 would amend the FEHA and Labor Code to: (1) add status as a sexual harassment victim to existing prohibitions on discrimination against employees who are victims of domestic violence, sexual assault, or stalking; (2) create a rebuttable presumption of unlawful retaliation if the employer—within 30 days of notice of the victim’s status—discharges or threatens to discharge, demotes, suspends, or otherwise discriminates against a victim employee; (3) make a business jointly liable for harassment of workers supplied by the business’s labor contractor (existing law similarly extends liability for the contractor’s failure to pay wages and obtain valid workers’ compensation coverage); (4) prohibit businesses from shifting to their labor contractors duties or liabilities under the Labor Code workers’ compensation insurance provisions.

Expanding Record Retention Duties. AB 1867 would require employers with 50 or more employees to maintain records of internal employee complaints alleging sexual harassment for at least five years after the last day of employment of either the complainant or the alleged harasser named in the complaint, whichever is later. If an employer fails to comply, then AB 1867 would allow the DFEH to seek an order requiring the employer to do so.

Extending the Deadline for Harassment Complaints. AB 1870 would extend a complainant’s time to file an administrative charge with the DFEH from one year to three years after the alleged incident. This expansion of the limitations period would apply to all types of FEHA-prohibited conduct, including sexual harassment.

Adopt or reject specified judicial decisions regarding sexual harassment (in each case expanding employer liability). Specifically, SB 1300 would (1) prohibit reliance on Brooks v. City of San Mateo to determine what conduct is sufficiently severe or pervasive to constitute actionable harassment, (2) disapprove any language in Kelley v. Conco Companies that might support different standards for hostile work environment harassment depending on the type of workplace, and (3) affirm Nazir v. United Airlines, Inc.’s “observation that hostile working environment cases involve issues ‘not determinable on paper.’”

Expand an employer’s potential liability under the FEHA for acts of nonemployees to all harassment (removing the “sexual” limitation).

Prohibit an employer from requiring an employee to sign (in specified circumstances) (1) a release of FEHA claims or rights or (2) a document prohibiting disclosure of information about unlawful acts in the workplace.

Prohibit a prevailing defendant from being awarded attorney’s fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought or that the plaintiff continued to litigate after it clearly became so.

Authorize (but not require) an employer to provide bystander intervention training to its employees.

Expanding Scope of Required Sexual Harassment Training.SB 1343 would require an employer of five or more employees—including seasonal and temporary employees—to provide certain sexual harassment training by January 1, 2020. Within six months of their assuming their position (and once every two years thereafter), all supervisors are to receive at least two hours of training, and all nonsupervisory employees are to receive at least one hour. SB 1343 would also require the DFEH to make available a one-hour and a two-hour online training course employers may use and to make the training videos, existing informational posters, fact sheets, and online training courses available in multiple languages.

Effective January 1, 2020, all employers applying for new or renewed registration must demonstrate completion of sexual harassment violence prevention requirements and provide an attestation to the Labor Commissioner.

The Department of Industrial Relations (“DIR”) must convene an advisory committee to develop requirements for qualified organizations and peer-trainers for employers to use in providing training, and the DIR must maintain a list of qualified organizations and qualified peer-trainers.

Employers, upon request, must provide an employee a copy of all training materials.

AB 2079 would also prohibit the Labor Commissioner from approving a janitorial service employer’s request for registration or for renewal if the employer has not fully satisfied a final judgment to a current or former employee for a violation of the FEHA.

Requiring Sexual Harassment Education for In-Home Support Services.AB 3082 would require the Department of Social Services to develop or identify—and provide a copy and description to the Legislature by September 30, 2019—(1) educational materials addressing sexual harassment of in-home supportive services (IHSS) providers and recipients, and (2) a method to collect data on the prevalence of sexual harassment in the IHSS program.

Requiring Sexual Harassment Education by Talent Agencies. AB 2338 would require talent agencies to provide adult artists, parents or legal guardians of minors aged 14-17, and age-eligible minors, within 90 days of retention, educational materials on sexual harassment prevention, retaliation, and reporting resources. For adult model artists only, the talent agency would be required to provide materials on nutrition and eating disorders. Talent agencies would also have to retain, for three years, records showing that those educational materials were provided.

Strengthening Prohibitions Against Harassment With Respect to Professional Relationships. SB 224 would give additional examples of professional relationships where liability for claims of sexual harassment may arise and authorize the DFEH to investigate those circumstances.

Non-Harassment Bills

Opening Doors for Women in the Boardroom. “The time has come for California to bring gender diversity to our corporate boards,” stated co-author Senator Hannah-Beth Jackson in her August 30 press release regarding SB 826. SB 826 would require a publicly held corporation based in California to have a minimum number of females—people who self-identify as women, regardless of their designated sex at birth—on its board of directors. This bill would require each such corporation, by December 31, 2019, to have at least one female director on its board and, if no board seats open up before this date on an all-male board, the corporation would need to increase its authorized number of directors and fill a new seat with a woman. The bill would impose minimum seats that must be filled by women, proportional to the total number of seats, by the end of July 2021. The bill would require the Secretary of State to publish a report by July 1, 2019 of the number of corporations headquartered in California that have at least one female director, and a report by March 1, 2020, detailing (1) the number of corporations that complied with requirements in 2019, (2) the number of corporations that moved their headquarters in or out of California, and (3) the number of publicly held corporations subject to this bill during 2019, but no longer publicly traded.

Corporations failing to comply would face penalties. For each director’s seat not held by a female during at least a portion of the calendar year—when by law it should have been—the corporation would be subject to a $100,000 fine for the first violation and a $300,000 fine for further violations. Corporations that fail to timely file board member information with the Secretary of State would also be subject to a $100,000 fine.

Expanding Lactation Accommodations. Two bills specifying the types of spaces employers must provide women for lactation are now before the Governor. AB 1976 would require employers to make reasonable efforts to provide a room or location (that is not a bathroom, deleting “toilet stall” and inserting “bathroom”) for lactation. The bill would authorize a temporary lactation location if certain conditions are met and provides a narrow undue hardship exemption.

Provide a lactation room with prescribed features and access to a sink and refrigerator (or another cooling device suitable for storing milk) in close proximity to the employee’s workspace.

Develop and distribute to employees a lactation accommodation policy.

Maintain accommodation request records for three years and allow the employee and Labor Commissioner access to the records.

SB 937 would also deem the denial of break time or space for lactation a failure to provide a rest period under Labor Code section 226.7. This bill would require the DLSE to create a model lactation accommodation request form and authorize the DLSE to create a model lactation policy and best practices.

Encouraging Mediation Confidentiality. SB 954 would require attorneys, except in class actions, to provide their mediating clients with a written disclosure containing the mediation confidentiality restrictions provided in the Evidence Code and to obtain a written acknowledgment signed by the client stating that the client has read and understands the confidentiality restrictions. This duty arises as soon as reasonably possible before the client agrees to participate in mediation or a mediation consultation, The bill is an encouragement, with little consequence, providing that an attorney’s failure to comply is not a basis to set aside an agreement prepared in mediation or pursuant to a mediation.

Criminal History. SB 1412—the only bill this year covering criminal background checks to survive the legislative gauntlet—would require employers to consider only a “particular conviction” (as defined by the bill) relevant to the job when screening applicants using a criminal background check.

Pay Statements. Stating it is declaratory of existing law, SB 1252 would amend Labor Code section 226 to provide employees the right “to receive” a copy—not just inspect or copy—their pay statements.

Immigration Documents. AB 2732 would make it a misdemeanor— subject to a $10,000 penalty—for an employer to destroy or withhold passports or other immigration documents. This bill would also require an employer to provide the “Worker’s Bill of Rights” (to be developed by the DIR) to employees either before verifying employment eligibility if hired on or after July 1, 2019 and whenever the document is made available by the DIR if the employee is hired before July 1, 2019. Employers would be required to keep signed copies of this document for at least three years. AB 2732 also would clarify the definition of janitorial services’ employer under the Labor Code, provide that additional contact and compensation information for janitorial workers be retained for three years, and require these employers (as part of their application or renewal of their registration) to attest that sexual violence and harassment prevention training has been provided.

Contractor Liability. AB 1565 would, immediately upon the Governor’s signing, repeal the express provision that relieved direct contractors for liability for anything other than unpaid wages and fringe or other benefit payments or contributions including interest owed.

Port Drayage Motor Carries. SB 1402 would require the DLSE to post a list on its site of “bad actor” port drayage motor carriers. Examples would include companies with any unsatisfied judgment or assessment or any “order, decision, or award” finding illegal conduct as to various wage/hour issues, specifically including independent contractor misclassification and derivative claims. SB 1402 would also extend joint and several liability to the customers of “bad actor” drayage motor carriers for their future wage violations of the same nature.

Stay tuned! We will provide a full update of those bills that were voted and signed into law this Session, as well as which bills failed to meet the Legislature’s or Governor’s approval, after Governor Brown has done his work on the remaining bills.

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Published by Seyfarth Shaw LLP, this blog is for in-house attorneys, HR professionals, business owners, and managers who face real issues on a daily basis and need practical solutions to address them. We aim to provide timely, topical information on the challenges that California employers face. Unlike blogs that simply provide legal updates, this blog will have a running series of Workplace Solutions that will address evolving areas of interest, including California leaves of absence, recruiting and hiring, trade secrets, and the use of social media.